Share of Twitter plummeted $8.52, to $57.34, following its news that monthly active users came in at 241 million, a 30 percent year-over-year increase but well below expectations.

The company, based here, reported $9.8 million in net income, or $0.02 per share, on $243 million in revenue.

Twitter was expected to report a loss of $13 million in net income on $218 million in revenue in the quarter, according to the survey of estimates from Thomson Reuters. Analysts were predicting a loss of $0.02 per share.

Shares of Twitter have seen a 47 percent run-up in trading since the company went public Nov. 7.

Twitter has a lofty valuation relative to its peers. Twitter is valued at about $37 billion, or nearly 33 times estimated 2014 sales of $1.2 billion. Meanwhile, Facebook trades at 14 times this year's sales forecasts while LinkedIn is at 12 times.

Also of concern, Twitter's deceleration of monthly active users, a closely watched measurement, raises questions about its ability to continue to grow.

The company faces some headwinds in lock-up expirations on its stock. About 9.9 million shares will become eligible for sale by non-executive insiders on Feb. 15, and on May 7 it's expected that 454.3 million shares held by all insiders will lose trading restrictions, putting downward pressure on the stock.

"We find TWTR's current valuation to be excessive (at 32.4x '14E Revenue) and continue to see more downside than upside short-term, given outsized (whisper) Street expectations and fast-approaching lock-up expirations," wrote cantor Fitzgerald analyt Youssef Squali in a report.